WEBVTT - Market Risks Rise Amid Tariffs and a Government Shutdown 0:00:02.520 --> 0:00:13.760 Bloomberg Audio Studios, podcasts, radio news. This is the Bloomberg 0:00:13.840 --> 0:00:17.920 Surveillance Podcast. Catch us live weekdays at seven am Eastern 0:00:18.200 --> 0:00:22.000 on Apple CarPlay or Android Auto with the Bloomberg Business App. 0:00:22.360 --> 0:00:25.680 Listen on demand wherever you get your podcasts, or watch 0:00:25.760 --> 0:00:27.040 us live on YouTube. 0:00:27.520 --> 0:00:31.120 Expert and Uncertainty and the Distinctions to risk is Jeff 0:00:31.160 --> 0:00:34.760 for you. We're thrilled that he could join us this morning. 0:00:34.800 --> 0:00:38.479 Of course, with being white wealth, he is senior. He 0:00:38.600 --> 0:00:41.720 A strategists. Jeff, how do you define how do you 0:00:41.920 --> 0:00:44.680 identify the uncertainty right now? 0:00:45.920 --> 0:00:49.360 Well, it depends on which asset class you are asking about, right. 0:00:49.400 --> 0:00:52.559 So if I look at foreign exchange options, for example, yes, 0:00:52.600 --> 0:00:56.040 I'm uncertainty in the front end judging by implied volatility, 0:00:56.080 --> 0:00:59.000 but going further down the curve doesn't look like it right, say, 0:00:59.160 --> 0:01:01.360 a lot of frontend on certainty. But the market seems 0:01:01.360 --> 0:01:03.400 to think that stuff will sort itself out. 0:01:03.520 --> 0:01:05.520 I'm not so sure about that, so. 0:01:05.560 --> 0:01:07.640 Jeffery, I mean, you know, we've been talking about the 0:01:07.640 --> 0:01:10.840 strength of the US exceptionalism over the last I don't 0:01:10.880 --> 0:01:13.200 know a year two years here, and that's been reflected 0:01:13.200 --> 0:01:16.560 in a strong dollar. What's the word order look like 0:01:16.640 --> 0:01:18.679 right now, and you look at the currency markets, where 0:01:19.080 --> 0:01:19.880 is the opportunity. 0:01:21.360 --> 0:01:24.080 Well, the biggest repricing certainly has been in the Euro 0:01:24.200 --> 0:01:27.400 and I would add, you know some other low yielding 0:01:27.480 --> 0:01:30.919 European exporter currencies, you know, like the Swedish krona, check runa, 0:01:30.920 --> 0:01:34.319 you know, Swiss Frankliner for example, Denmark, even they're going 0:01:34.360 --> 0:01:38.200 to benefit from any restructuring in the Eurozone and a 0:01:38.240 --> 0:01:41.399 big fiscal push. So that's where the opportunities is. And 0:01:41.440 --> 0:01:44.720 because the dollar has enjoyed such a large rate differential 0:01:44.800 --> 0:01:46.920 over these currencies, people are happy to sit on long 0:01:47.040 --> 0:01:49.280 US dollars and sit on the carry trade. But now 0:01:49.320 --> 0:01:51.760 with that easying being priced back in, clients are not 0:01:51.800 --> 0:01:55.200 so sure. So these carry trades, these hedges, they are 0:01:55.200 --> 0:01:57.280 being unwound. So as much as I'd like to call 0:01:57.320 --> 0:01:59.200 the top in the Euro right now, given it's gone 0:01:59.200 --> 0:02:01.800 against my view looking at the size of those hedges, 0:02:01.880 --> 0:02:02.919 I'm still not so certain. 0:02:03.160 --> 0:02:05.600 So in the Euro here, I mean again, several weeks 0:02:05.640 --> 0:02:09.360 ago we saw Germany make a really big, big pivot 0:02:09.400 --> 0:02:13.080 there and talk about investing in their infrastructure, investing in 0:02:13.200 --> 0:02:17.919 their military, suggesting a little bit of a well actually 0:02:17.919 --> 0:02:20.720 a lot of a change in their bias. Is there 0:02:20.800 --> 0:02:22.920 still upside to the euro? We were trying to get 0:02:22.960 --> 0:02:26.120 the euro to parody for Tom Keane, but that's not happening. 0:02:27.080 --> 0:02:29.280 So, you know, I would that was my target for 0:02:29.360 --> 0:02:31.080 last year and early this year, and given what the 0:02:31.080 --> 0:02:33.720 ECB has said as well about inflation, probably not like 0:02:33.760 --> 0:02:34.920 Peter falling back to target. 0:02:35.120 --> 0:02:37.200 And then the future that is going to be. 0:02:37.120 --> 0:02:39.320 A difficult I still think we end the below where 0:02:39.360 --> 0:02:41.160 we are right now close to one o five rather 0:02:41.160 --> 0:02:43.600 than one point fifteen or so. The proof will be 0:02:43.639 --> 0:02:45.560 in the delivery and this is going to take a 0:02:45.720 --> 0:02:48.679 long long time, but the outlook is positive, and I 0:02:48.720 --> 0:02:49.440 would conceive that. 0:02:49.680 --> 0:02:52.200 Jeffer you I'm hearing from a lot of other people 0:02:52.200 --> 0:02:56.680 what I'm hearing from you. Somewhere over the horizon, there's 0:02:56.720 --> 0:03:00.680 a bet that everything comes down, maybe we normalize and 0:03:00.680 --> 0:03:02.720 get back to you know, stock market gets a bit 0:03:02.760 --> 0:03:05.960 out and everything's fine as well. My problem is I'm 0:03:05.960 --> 0:03:09.680 reading the globe and mail up in Toronto or lamand 0:03:09.760 --> 0:03:14.200 in Paris, and I see massive tear of tension. How 0:03:14.200 --> 0:03:19.040 do you fold the politics and the Trump politics into 0:03:19.080 --> 0:03:20.800 your finance analysis. 0:03:21.800 --> 0:03:23.280 So going back to an earlier point. 0:03:23.360 --> 0:03:26.640 Yes, it stabilizes, but it won't stabilize at the level 0:03:26.680 --> 0:03:31.600 that we were at. Right, So euro dollar trend stabilization 0:03:31.639 --> 0:03:33.640 and neutral rates, it's not going to be back at parity. 0:03:33.720 --> 0:03:35.720 It's not going to be based on growth differentials that 0:03:35.760 --> 0:03:38.080 we thought with the case in the past Chinese equity 0:03:38.120 --> 0:03:41.440 markets people rendered uninvestable back in the day, not so 0:03:41.600 --> 0:03:43.840 much in the future. So Canada, what's going to be 0:03:43.880 --> 0:03:46.200 the nature of the economy. So yes, we will stabilize, 0:03:46.240 --> 0:03:49.280 but at a different level, subject to other changes that 0:03:49.320 --> 0:03:50.280 are taking place right. 0:03:50.120 --> 0:03:55.200 Now, quantify our parity and euro is stabilization. I don't 0:03:55.200 --> 0:03:57.520 want to pin you down here, it's unfair, but are 0:03:57.520 --> 0:04:00.400 we doing is the new parody at one of five 0:04:01.040 --> 0:04:01.880 or a one to ten. 0:04:03.280 --> 0:04:05.839 So we look at exchange rate in real terms, right, 0:04:05.920 --> 0:04:08.000 so you look at growth differentials and you look at 0:04:08.000 --> 0:04:11.320 inflation differentials. It will be higher compared to where we 0:04:11.320 --> 0:04:13.840 were because if this works in Europe, and that is 0:04:13.880 --> 0:04:16.520 a big if, then trend growth will be higher. Why 0:04:16.600 --> 0:04:20.280 because productivity will be higher. The competitivist that Dragi court 0:04:20.320 --> 0:04:22.880 wal last year, that letter cored for last year, that 0:04:23.000 --> 0:04:26.440 may actually deliver demographics will be harder. But if productivity 0:04:26.480 --> 0:04:28.800 is higher, then trend growth will be higher and that 0:04:28.920 --> 0:04:30.799 means a higher real Europe. 0:04:31.160 --> 0:04:32.880 Or should we get you a few in trouble with 0:04:32.920 --> 0:04:35.640 compliance to this? Yeah, let's let's do it. Jeff you 0:04:36.000 --> 0:04:38.200 this is way off the remit, but you're so good 0:04:38.240 --> 0:04:41.839 at this. We're going to ask. Mario Draghi of Italy 0:04:42.200 --> 0:04:48.000 was a techno crat is Mark Kearney of Ottawa and techno. 0:04:47.720 --> 0:04:53.800 Cred So that would be the market characterization. But let's 0:04:53.800 --> 0:04:55.560 see what else he can do. You can be a 0:04:55.600 --> 0:04:59.120 technocrat and also a political leader who says these two 0:04:59.160 --> 0:05:02.120 are exclusive. And Mario Draghi was a political leader as well, 0:05:02.160 --> 0:05:05.160 so he led Italy for those two years. But of 0:05:05.160 --> 0:05:08.520 course under a technocratic mandate. So let's wait for the 0:05:08.520 --> 0:05:11.200 elections to see what the manifesto from the Liberal Party 0:05:11.240 --> 0:05:14.000 will be. What kind of a mandate he will run under, 0:05:14.160 --> 0:05:16.760 I assume be quite different compared to what Mario Dragi 0:05:16.839 --> 0:05:19.920 run under. But ultimately can he deliver for the Canadian economy? 0:05:20.040 --> 0:05:24.200 Can can he the German terms restructure the Canadian economy 0:05:24.400 --> 0:05:27.240 so that it is less perhaps dependent on two way 0:05:27.279 --> 0:05:28.440 trade south of the border. 0:05:28.480 --> 0:05:29.400 That will be the challenge for. 0:05:29.440 --> 0:05:32.640 Him, Jeffrey, just in a world of that we're all 0:05:32.680 --> 0:05:35.000 experiencing here over the last couple of months and over 0:05:35.000 --> 0:05:38.080 the last several weeks in particular, in your world, when 0:05:38.080 --> 0:05:40.120 you talk to your clients, what are they Are they 0:05:40.240 --> 0:05:44.320 looking for safety? Are they looking for just opportunities? What 0:05:44.360 --> 0:05:47.040 are they doing here in this world where nobody seems 0:05:47.040 --> 0:05:48.719 to know what's going to happen in the next minute, 0:05:48.720 --> 0:05:49.320 the next hour. 0:05:50.640 --> 0:05:53.560 So again those two are not mutually exclusive, right, So 0:05:53.880 --> 0:05:57.760 some safety names potentially are the opportunities as well. So certainly, 0:05:57.760 --> 0:05:59.080 and we all know, and it's showing up in our 0:05:59.120 --> 0:06:01.440 flow data. There has been a wide gap in US 0:06:01.520 --> 0:06:03.880 equity holdings versus the rest of the world. So we 0:06:03.920 --> 0:06:07.600 anticipated that to converge, you know, maybe not so speedily 0:06:07.640 --> 0:06:09.799 over the last few weeks or so, but that is happening. 0:06:09.880 --> 0:06:12.279 So there's a lot of cash on the sidelines right now. 0:06:12.440 --> 0:06:14.320 Where will that go? Do I put it in Asia 0:06:14.360 --> 0:06:16.479 with a China theme, the AI theme, or do I 0:06:16.520 --> 0:06:18.880 go in the europe reinvestment theme. But China is openly 0:06:18.920 --> 0:06:21.600 saying there is an inflation issue, a demand issue, So 0:06:21.680 --> 0:06:23.880 you've got to pick your sectors very very carefully. So 0:06:23.960 --> 0:06:26.919 the opportunity and safety, I would add in places where 0:06:27.120 --> 0:06:30.520 it's basically high earnings or high earnings growth potentially and 0:06:30.560 --> 0:06:33.400 also less exposure to what's going on right now, and 0:06:33.440 --> 0:06:36.279 also based on domestic public investment, the sodal sectors I 0:06:36.320 --> 0:06:36.760 want to be in. 0:06:36.920 --> 0:06:39.880 We start strong today on Bloomberg Surveillance. We do it 0:06:39.920 --> 0:06:42.599 with Jeffrey you of B and y Well. Thrilled that 0:06:42.640 --> 0:06:44.320 he could be with us. We welcome all of you 0:06:44.360 --> 0:06:49.080 on your commute across nation, across Canada. Good morning on 0:06:49.120 --> 0:06:53.360 Apple car Play. Andreid'o on YouTube, Paan, I am absolutely 0:06:53.400 --> 0:06:57.839 humbled by the growth out and Bloomberg Podcasts. Subscribe to 0:06:57.839 --> 0:07:02.800 Bloomberg Podcasts, and you know, we were just absolutely thrilled 0:07:02.800 --> 0:07:07.280 by it. And in particular good Morning, I just featured, 0:07:07.520 --> 0:07:11.440 I just featured Mumbai, he did, and the build out 0:07:11.520 --> 0:07:14.080 here Ray YouTube. I have an advisor on this, you 0:07:14.120 --> 0:07:16.600 do you know they said, they said, Tim, you're such 0:07:16.640 --> 0:07:19.520 a fossil, you got to have an advisor. So I 0:07:19.560 --> 0:07:22.640 have a Ray YouTube, and Ray YouTube says India is happening. 0:07:22.720 --> 0:07:26.360 So good morning and good evening, I should say, in India, 0:07:26.480 --> 0:07:30.239 Jeffy you with us with B and y Well Jeff, 0:07:30.320 --> 0:07:33.200 I look at China in the sort of to me, 0:07:33.560 --> 0:07:36.880 if I was speaking with President Trump and his fierce advisors, 0:07:37.440 --> 0:07:42.000 I would say, expect the unexpected. And if we export 0:07:42.400 --> 0:07:49.400 Chinese deflation or massive significant disinflation, are we under gaming 0:07:49.480 --> 0:07:52.320 where inflation is going to be in two, three, four years. 0:07:53.720 --> 0:07:56.400 So that's where the Chinese growth strategy up ahead is 0:07:56.400 --> 0:07:58.760 going to be really interesting. I would say, firstly, we're 0:07:58.800 --> 0:08:03.320 going to be seeing of China exporting disinflation right because 0:08:03.360 --> 0:08:08.080 inflation is expected to pick up. But secondly, this fiscal push, 0:08:08.320 --> 0:08:10.480 the deficit at four percent, where is it going to 0:08:10.480 --> 0:08:13.600 be concentrated. In the past, it's oh, it's infrastructure and 0:08:13.640 --> 0:08:15.920 real estate. It's going to help commodoties. That's not going 0:08:15.960 --> 0:08:18.240 to be the case this time around. Let's help the household, 0:08:18.320 --> 0:08:21.640 the consumer. If the household consuit of household consumption picks up, 0:08:22.160 --> 0:08:25.720 then the again consumer staples or even the consumer discretionary. Know, 0:08:25.760 --> 0:08:29.080 those are the areas where we can see reflation as well. 0:08:29.160 --> 0:08:31.120 This was expected in twenty twenty three, twenty four when 0:08:31.200 --> 0:08:34.040 China reopened, didn't really happen, But now better late than 0:08:34.040 --> 0:08:36.800 never could that happen. So I would say less deflation 0:08:36.920 --> 0:08:39.360 for sure, but can it be inflationary? Can it drive 0:08:39.440 --> 0:08:43.720 earnings upside in global consumer discretionary exposed to China. That 0:08:43.840 --> 0:08:46.000 is going to be the big challenge, Jeffrey. 0:08:46.120 --> 0:08:48.480 I mean, you know, I look at Ali Baba as 0:08:48.679 --> 0:08:52.400 my personal proxy for investor appetite for China. 0:08:53.080 --> 0:08:54.760 It might be, it might be exactly. 0:08:54.800 --> 0:08:57.400 I kind of feel like when Ali Barber, however, Ali 0:08:57.440 --> 0:08:59.160 Bobin trades, that's kind of a good proxy for how 0:08:59.160 --> 0:09:01.480 the world's viewing investment opportunities in China. 0:09:01.520 --> 0:09:02.600 It's up sixty. 0:09:02.240 --> 0:09:06.800 Percent this year. What's changed in China if anything, to 0:09:07.160 --> 0:09:11.600 bring it back to the forefront for maybe investors see 0:09:11.600 --> 0:09:12.760 as an option here. 0:09:13.760 --> 0:09:16.480 Right, So growth, we go back to the growth element, 0:09:16.640 --> 0:09:19.120 and for companies what matters, right margin? Can there be 0:09:19.200 --> 0:09:23.160 margin expansion? So can AI deliver the productivity growth and 0:09:23.240 --> 0:09:27.200 the compessimist gains, They will really boost earnings via margin expansion, 0:09:27.200 --> 0:09:29.400 and I think that's what's being priced near right now. 0:09:29.760 --> 0:09:32.880 So but I have to pivot back to the household. Ultimately, 0:09:32.920 --> 0:09:35.200 the final demand has to come from the household, you know, 0:09:35.240 --> 0:09:38.320 maybe directly from the government, but otherwise. But given these 0:09:38.400 --> 0:09:42.560 Chinese and consumers communication services companies, they really are in 0:09:42.679 --> 0:09:46.320 every aspect of household consumption. So that's where we hope 0:09:46.360 --> 0:09:48.840 the growth can be. Can it translate in high earnings 0:09:48.920 --> 0:09:51.600 and employment? I think that's what the government is hoping for. 0:09:51.800 --> 0:09:54.240 It's early days after the NPC. So far there's money 0:09:54.240 --> 0:09:57.640 on the table, and I would stress participation from international 0:09:57.640 --> 0:09:59.880 investors is very very light right now. We've seeing that 0:10:00.040 --> 0:10:02.560 in our data, we're seeing it in official data as well, 0:10:02.640 --> 0:10:05.319 so there is an opportunity there in terms of allocations. 0:10:05.480 --> 0:10:06.679 If you believe in the story. 0:10:06.559 --> 0:10:08.840 Jeff, you when you were at LC, there was a 0:10:08.920 --> 0:10:13.120 basic statement on Germany is some form of you know, 0:10:13.200 --> 0:10:17.920 to be brought about it a non American experiment. All 0:10:17.960 --> 0:10:21.760 of a sudden, it sounds like they're goosenomenal GDP. Do 0:10:21.840 --> 0:10:26.760 you actually believe Germany politically, and here's the keyword, folks, 0:10:27.240 --> 0:10:33.439 culturally is ready for a more Anglo American economy. 0:10:32.720 --> 0:10:36.360 Right, I think it is. Let's just say what prompted 0:10:36.400 --> 0:10:39.120 this cultural change? Was it something out of their own 0:10:39.200 --> 0:10:42.040 volition or something from outside? I think that is a 0:10:42.040 --> 0:10:45.520 political debate perhaps worth having. But then again, looking at 0:10:45.840 --> 0:10:49.240 Europe in general, if it often does respond better to 0:10:49.360 --> 0:10:52.200 external challenges, and I think we are seeing that play 0:10:52.240 --> 0:10:53.480 out this time around as well. 0:10:53.600 --> 0:10:54.760 So yes, there is a change. 0:10:54.800 --> 0:10:57.160 There is a change at least in the political culture, 0:10:57.360 --> 0:10:59.200 in the dynamic, and we're seeing that with Metz. 0:10:59.360 --> 0:11:02.640 One final question, what are you hearing from B and 0:11:02.800 --> 0:11:03.559 Y clients? 0:11:05.160 --> 0:11:08.800 So b Andy clients are again looking for opportunity, safe 0:11:08.800 --> 0:11:12.839 opportunities as stated earlier, so they are looking at their 0:11:12.880 --> 0:11:16.640 overall exposures. I wouldn't say there's too much conviction in 0:11:16.679 --> 0:11:18.400 one direction, you know all the other and we're seeing 0:11:18.440 --> 0:11:20.640 that in our underlying flows right now. But to start 0:11:20.679 --> 0:11:23.160 off with, certainly we are seeing some dollar positions, some 0:11:23.240 --> 0:11:25.600 dollar longs and being taken off, or they're reducing their 0:11:25.600 --> 0:11:29.400 hedges on overseas assets. Is the next step mass rotation 0:11:29.640 --> 0:11:31.760 out of the US into other markets. 0:11:31.920 --> 0:11:34.040 We're not seeing that yet. Home buyers are strong. 0:11:34.120 --> 0:11:36.839 Take Europe for example, it's being driven by European investors, 0:11:37.000 --> 0:11:39.680 not global investors. Will that change? I think that's the 0:11:39.720 --> 0:11:41.280 ass allocation story for the year. 0:11:41.400 --> 0:11:43.800 Jeffer, you with B and why Paul, that's what we 0:11:43.880 --> 0:11:45.400 call a seven am. 0:11:45.040 --> 0:11:48.920 Call exactly on the street and offices in London there 0:11:49.160 --> 0:11:51.920 that is a five minute walk from Bloomberg. I think 0:11:52.080 --> 0:11:54.000 next time, Jeffrey can walk over to the Bloomberg What 0:11:54.040 --> 0:11:55.719 do you think, I think the studio and doing that. 0:11:56.080 --> 0:11:57.040 It's right around the corner. 0:11:57.720 --> 0:12:00.760 Jeff thank you so much getting us started here. 0:12:00.880 --> 0:12:04.440 You're listening to the Bloomberg Surveillance Podcast. Catch us live 0:12:04.520 --> 0:12:07.720 weekday afternoons from seven to ten am Eastern Listen on 0:12:07.760 --> 0:12:11.440 Applecarplay and Android Atto with the Bloomberg Business app, or 0:12:11.600 --> 0:12:13.080 watch us live on YouTube. 0:12:13.240 --> 0:12:16.360 It's a perfect time that if you're out of a job, 0:12:16.559 --> 0:12:18.920 where do you go? And you go to Zip Recruiter. 0:12:18.920 --> 0:12:22.400 They're chief economist, one of our favorites. Julia Pollock joins 0:12:22.480 --> 0:12:27.040 us right now. Julia, Zip Recruiter, have you seen a change? 0:12:27.080 --> 0:12:31.200 Can you give us wisdom or perspective on this new 0:12:31.280 --> 0:12:37.560 job market? With so many people so quickly out of work, it. 0:12:37.559 --> 0:12:40.640 Is a slow job market. That is what I'll say 0:12:40.679 --> 0:12:46.000 about that. The well, there was a big poppet optimism 0:12:46.000 --> 0:12:49.840 in the fourth quarter. Our first quarter surveys of twenty 0:12:49.880 --> 0:12:52.880 eighty five are now wrapping up, and what we're finding 0:12:53.040 --> 0:12:58.160 is that that bump has disappeared. Job Seekers are saying 0:12:58.280 --> 0:13:02.199 that the largest numbers ever that their job search is 0:13:02.280 --> 0:13:06.120 going poorly. We have the largest share of job seekers 0:13:06.160 --> 0:13:11.080 ever with zero offers, job seekers of lost confidence that 0:13:11.320 --> 0:13:13.319 there are plenty of jobs available. So we have the 0:13:13.640 --> 0:13:16.720 largest share of job seekers ever, over forty percent saying 0:13:16.720 --> 0:13:18.880 that they have they're not confident at all that they 0:13:18.920 --> 0:13:22.600 are jobs available. So our first quarter survey is a 0:13:22.600 --> 0:13:23.600 somewhat gloomy one. 0:13:23.720 --> 0:13:26.600 I'd have to say, and Julia, what do you think 0:13:26.920 --> 0:13:31.160 has changed here? Is it just some of the uncertainty 0:13:31.240 --> 0:13:34.000 that a lot of folks in the economy are feeling today, 0:13:34.040 --> 0:13:36.960 is we try to figure out how these TIFFs and 0:13:37.320 --> 0:13:40.800 immigration changes may impact kind of the environment. 0:13:42.640 --> 0:13:45.680 So I see a continuation of what was happening before. Right, 0:13:45.720 --> 0:13:48.480 We've had a two year slow down and hiring okay, 0:13:48.920 --> 0:13:54.160 And I think that excessive spending, high inflation, high interest rates, 0:13:54.160 --> 0:13:59.400 they have a very long hangover. And many companies were saying, 0:13:59.720 --> 0:14:02.160 let's survived till twenty five, and they were hoping that 0:14:02.920 --> 0:14:05.400 inflation would be conquered and that interest rates would come 0:14:05.440 --> 0:14:07.640 back down to the normal by twenty twenty five. That 0:14:07.720 --> 0:14:10.719 has not happened, so we still have inflation on so 0:14:11.120 --> 0:14:14.600 we still have interest rate uncertainty, and now an additional 0:14:14.640 --> 0:14:18.480 we also have policy certy. So that is the picture 0:14:19.480 --> 0:14:20.440 Bloomberg surveillance. 0:14:20.480 --> 0:14:23.440 Folks, so commute across the nation from Julia Pollock's left 0:14:23.480 --> 0:14:26.640 coast over here to ninety nine and one FM in Washington, 0:14:26.720 --> 0:14:29.040 ninety two to nine FM up in Boston. Good Morning, 0:14:29.040 --> 0:14:31.960 Bloomberg eleven three to zero and a cold spring morning 0:14:32.000 --> 0:14:36.040 here in New York. On YouTube, subscribe to Bloomberg Podcast. 0:14:36.120 --> 0:14:39.680 It's a new way to discover us. Find that again 0:14:39.840 --> 0:14:44.520 at YouTube. Thank you for googling YouTube for their support, Julia. 0:14:44.600 --> 0:14:48.360 When you just give me the litany of how difficult 0:14:48.440 --> 0:14:51.360 it is to get a job. Your job at ZIP 0:14:51.360 --> 0:14:55.360 recruiter is to pull that over to the unemployment rate. 0:14:55.960 --> 0:14:59.680 We're having a raging debate. When is the when of 0:14:59.760 --> 0:15:03.720 say four point eight percent unemployment? Is the when of 0:15:03.760 --> 0:15:06.680 that this year? Or do you go out further into 0:15:06.760 --> 0:15:07.240 next year? 0:15:08.800 --> 0:15:12.680 It possibly won't get there. And that's because we are 0:15:12.680 --> 0:15:16.600 in the middle of peak sixty five, with the with 0:15:16.640 --> 0:15:19.360 the largest numbers of Americans turning sixty five every year, 0:15:19.840 --> 0:15:24.360 five years of ay boomers aging out like this and 0:15:24.920 --> 0:15:29.320 becoming eligible for Medicare and for retirement, and then we 0:15:29.320 --> 0:15:32.200 also have immigration falling steeply. It's one of the first 0:15:32.200 --> 0:15:35.120 things the President did was sign an executive order ending 0:15:35.120 --> 0:15:40.480 as Island programs for workers from Afghanistan Nico Lagua Hate. 0:15:42.320 --> 0:15:46.440 So those programs together accounted for about five hundred thousand 0:15:46.760 --> 0:15:50.040 immigrant inflows a year, and many of those workers got 0:15:50.880 --> 0:15:54.440 employment pieces right away. That stopped right away. Other kinds 0:15:54.520 --> 0:15:58.760 of border crossings have stopped, and so the number of 0:15:59.600 --> 0:16:01.680 people you need to be absorbed by the slave market 0:16:01.760 --> 0:16:04.800 keeps falling, and so perhaps even with slow hiring, we 0:16:04.840 --> 0:16:06.760 won't see an object in unemployment. 0:16:08.120 --> 0:16:11.040 Julia, Thank you so much, Julia Pollack. That was riveting folks. 0:16:11.080 --> 0:16:13.840 The beginning of that conversation with actually what they're seeing 0:16:14.280 --> 0:16:17.720 it ZIP recruiter was extraordinary. About a Tona's change, I'm 0:16:17.720 --> 0:16:20.960 going to rephrase the tone has changed. And what I 0:16:21.040 --> 0:16:25.400 saw there, Paul was if you're out looking for a job, 0:16:25.680 --> 0:16:28.280 the percentage of people with zero offers. 0:16:28.480 --> 0:16:28.600 Ye. 0:16:28.920 --> 0:16:32.000 I think you know she's going, you know, Julia Pollock fast, 0:16:32.160 --> 0:16:35.320 but I think that's what I got out of it. 0:16:35.400 --> 0:16:36.080 Is well. 0:16:42.000 --> 0:16:45.920 This is the Bloomberg Surveillance Podcast. Listen live each weekday 0:16:45.960 --> 0:16:49.000 starting at seven am Eastern on Apple, Corplay and Android 0:16:49.000 --> 0:16:52.040 Auto with the Bloomberg Business app. You can also listen 0:16:52.120 --> 0:16:55.360 live on Amazon Alexa from our flagship New York station. 0:16:55.920 --> 0:16:58.600 Just say Alexa play Bloomberg eleven thirty. 0:16:58.800 --> 0:17:02.520 We went out on this morning of wine and cheese 0:17:02.600 --> 0:17:07.800 fromage in Champagne tariffs, and we tried to find someone 0:17:07.840 --> 0:17:13.280 who's tried every liqueur that mister Arnaud has at LVMH 0:17:13.680 --> 0:17:17.720 joining us now Robert Harmatz's public service to the nation, 0:17:18.480 --> 0:17:21.919 just back from Paris, and of course with all of 0:17:21.960 --> 0:17:25.520 this history, getting us at least halfway back to McKinley. 0:17:25.520 --> 0:17:29.680 Ambassador Armitz, thank you for joining us this morning. You 0:17:29.800 --> 0:17:32.439 got a piece of chalk in your hand. You're up 0:17:32.480 --> 0:17:36.119 at Toughs. What do you say into the diplomacy students 0:17:36.520 --> 0:17:38.240 at Toughs University this morning? 0:17:39.119 --> 0:17:45.560 Well, I'm saying basically that the process of reaching some 0:17:45.640 --> 0:17:50.000 sort of compromise moved a little bit ahead in the 0:17:50.080 --> 0:17:53.520 last few days in the discussions between the US and 0:17:53.760 --> 0:17:58.960 Green But the critical part is that Putin started this war, 0:17:59.680 --> 0:18:04.959 and Putin is a critical element in reaching a truce 0:18:05.240 --> 0:18:09.840 and reaching a conclusion of full peace. And it appears 0:18:09.880 --> 0:18:12.840 to me that what he is showing us by wearying 0:18:12.920 --> 0:18:18.480 his military fatigues and his rhetory is that he does 0:18:18.520 --> 0:18:21.919 not seem to be willing to do any of the 0:18:21.960 --> 0:18:27.000 things needed to reach a compromise on the truth or 0:18:27.040 --> 0:18:29.600 on a piece. And the question is what is the 0:18:29.680 --> 0:18:33.440 United States going to do visa e Putin? We've said 0:18:33.480 --> 0:18:37.800 we President said he trusted him. He is now demonstrated 0:18:37.840 --> 0:18:39.719 he is going to do his own thing. He's going 0:18:39.760 --> 0:18:41.760 to be after In the Great and Peter the Great, 0:18:42.240 --> 0:18:46.320 and a compromise with the United States or Ukraine does 0:18:46.359 --> 0:18:48.480 not seem to be in his cards, which means there's 0:18:48.520 --> 0:18:51.800 a major diplomatic problem with him, and we're going to 0:18:51.840 --> 0:18:52.679 have to address that. 0:18:52.720 --> 0:18:55.199 There's no way around the distinction here, Paul. For me, 0:18:55.640 --> 0:18:59.720 is a diplomacy of Hormance or Kissinger or others. There's 0:18:59.760 --> 0:19:02.920 a lot of silence. There's a lot of quiet, and 0:19:03.080 --> 0:19:07.240 is Robert Hormett states there were in a very verbal diplomacy. 0:19:07.359 --> 0:19:09.159 Right now, it seems like a bob So how do 0:19:09.200 --> 0:19:11.600 you think this is going to play out over the 0:19:11.680 --> 0:19:14.959 next several weeks and months as it relates to Ukraine, 0:19:15.040 --> 0:19:18.080 Russia and US, and I guess not the Europeans. 0:19:18.440 --> 0:19:20.920 Well, I had a long talk with the Europeans. That's 0:19:20.960 --> 0:19:24.199 another diplomatic issue that has to be confronted. The Europeans 0:19:24.280 --> 0:19:27.480 feel that they have been pushed aside, that they've not 0:19:27.600 --> 0:19:33.159 been included in the conversations. And the whole history of 0:19:33.200 --> 0:19:37.760 the United States strategically after World War Two has been 0:19:37.840 --> 0:19:40.600 to work with our allies. The one thing we have 0:19:40.760 --> 0:19:45.040 that China and Russia both do not have our strong allies, 0:19:45.600 --> 0:19:50.840 and we're alienating them, and we're putting them, sidelining them. 0:19:51.000 --> 0:19:53.879 And I think this is going to weaken us in 0:19:53.960 --> 0:19:56.480 the long run. Viz A VI, Putin and visa VI 0:19:57.119 --> 0:20:01.199 the rest of the world, and very important, the confidence 0:20:01.320 --> 0:20:06.919 and our reliability to support our allies is diminished quite dramatically. 0:20:07.000 --> 0:20:09.000 All the Europeans I talked to said, and we have 0:20:09.040 --> 0:20:12.879 confidence in you, And I said, well, we have a 0:20:12.960 --> 0:20:17.000 history of being with you. And they say, if you're 0:20:17.000 --> 0:20:21.040 having a fight with your best friend and neighbor, Canada, 0:20:21.520 --> 0:20:24.160 how can we rely on you to support us, particularly 0:20:24.200 --> 0:20:29.240 the smaller Estonia Latvia Lithuania. Are you just gonna toss 0:20:29.440 --> 0:20:32.720 them to the side. So credibility is on the line here. 0:20:32.920 --> 0:20:35.520 Howard Latnik with us earlier the Secretary of Commerce and 0:20:35.600 --> 0:20:39.280 now Ambassador Hormance with this of course always affiliated with 0:20:39.280 --> 0:20:43.240 the Kissinger associates will speak with the ambassador. Jess Metton 0:20:43.280 --> 0:20:45.919 will get us to the nine o'clock hour here on 0:20:46.000 --> 0:20:47.399 exequity markets. 0:20:47.000 --> 0:20:52.040 Paul so Bob, how should we think about mister Putin? 0:20:52.040 --> 0:20:52.200 Here? 0:20:52.440 --> 0:20:55.640 One could argue he could come out of this stronger 0:20:55.680 --> 0:20:59.119 than ever. And is that something that the Europeans that 0:20:59.160 --> 0:21:01.040 you spoke with their con Yes. 0:21:02.320 --> 0:21:07.120 I think that we underestimate how bad his economy is 0:21:07.800 --> 0:21:11.679 at this point and how many people he's lost. The 0:21:11.720 --> 0:21:15.280 only trouble is he lives in an information bubble. In 0:21:15.359 --> 0:21:20.600 authoritarian government's information rarely moves up, particularly bad information, so 0:21:20.640 --> 0:21:23.560 he may not have a very good idea of actually 0:21:23.640 --> 0:21:25.879 what's going on in the battlefield. And a lot of 0:21:25.920 --> 0:21:29.880 Russians only get information from state sources, so they may 0:21:29.880 --> 0:21:33.000 not know. But the economy is in terrible shape, a 0:21:33.040 --> 0:21:34.920 lot of jobs have been lost, a lot of very 0:21:34.920 --> 0:21:38.520 good people have left. On the other hand, he does 0:21:38.560 --> 0:21:42.040 have nuclear weapons, and if we give him a truce, 0:21:42.600 --> 0:21:48.360 he's using this truth to further extend his power and 0:21:48.480 --> 0:21:53.080